General · 3 November 2025
Experts Warn Reeves' Proposed VAT Cut on Electricity Bills Would Unfairly Benefit Wealthy While Undermining Climate Goals
Chancellor Rachel Reeves is weighing the removal of the 5% VAT on household electricity in the upcoming 26 November Budget, aiming to lower energy bills. Analysts note this £2.2–2.5 billion policy would mostly assist higher-income families with greater energy use. Critics highlight risks of increased emissions and breaching the EU’s VAT minimum. Alternatives under discussion include shifting green levies to general taxation or offering targeted, means-tested support.
Reported by Guardian · How we write briefs